pendence. We are being subjected to pressures to put the Maritime Administration in the Department of Transportation--to make a lateral move, if you will, instead of a forward move.

I don't believe we are being willful or stubborn in our refusal to follow this persistent advice from the administration. There was a time, frankly, when I might have listened to these arguments about putting Martime in the Department of Transportation-but that time has long since passed.

Had we heard in the two and a half years since we were first promised a national maritime program, some concrete suggestions that demonstrated a concern for the merchant marine and determination to put our maritime affairs in order, I might have been persuaded to at least consider the possibility of making this agency an integral part of the Department of Transportation.

But no substantive program has been forthcoming. Instead, we have heard suggestions, from the Secretary of Transportation in particular, that we turn to foreign shipyards to build our ships; we have heard suggestions that the subsidy system operates against the principle of "free trade" and that, therefore, the Secretary is "philosophically" opposed to this important part of the maritime program that he would be called upon to administer; and we have seen no inclination on the part of the Secretary or his Department to do anything about the growing problem of "flags of convenience"-the runaway ships which rob this country of tax revenue, and rob our American-flag ships or more and more of the Nation's import-export cargo. No, Mr. Chair man, I have no sense of ease about how the maritime program would be administered if we ever put it under the jurisdiction of the Department of Transportation.

We are asked to put Maritime in a Cabinet-level department but the record shows all too clearly that, when this was done before, our Nation's maritime affairs went downhill at breakneck speed. When we had an independent agency supervising our maritime program, we worked our way up to a point where-not in wartime but in peace time we were carrying more than 40 percent of our import-export

cargo.

Since Maritime was incorporated into the Department of Commerce, this share of cargo carriage has slid lower and lower-and we are now carrying something less than 8 percent of our cargo in American ships, even though our waterborne foreign commerce has been growing steadily. In other words, we have been shipping more and more tonnage by sea every year, but an ever-increasing percentage of this has been carried on foreign-flag vessels.

It is my earnest belief, Mr. Chairman, that the Maritime Adminis tration must be established as an independent agency under neither the Department of Commerce nor the Department of Transportation. That is the sense and import of the 100 bills-my own includedwhich are now being considered by this committee. I believe firmly that only as an independent agency, free from subordination to other transportation concerns or other concerns of any type-can the Maritime Administration come up with the kind of program necessary to

revitalize our fleet.

This granting of maritime independence, of course, is only a part of the task that we face to put our merchant marine affairs in order

but is an important element, probably the key element in everything that we do. It would go hand in hand with the measure reported out by his committee, and voted favorably on by the House, to allow this committee and its Senate counterpart to authorize merchant marine appropriations.

This will strengthen the congressional oversight in the maritime. field-and it will give an independent agency a powerful ally here on the Hill in shaping a program to fit our present and future needs. Given maritime independence, and given annual congressional authorization of its budget needs, the Maritime Administration can move forward vigorously with a program to build enough new shipsin American yards so that we can replace the outdated ships that now comprise the majority of our fleet.

With bigger, newer, faster vessels-and the judicious use of public funds to help keep these vessels on the high seas and with a sensible program to allocate a significantly larger share of Government-sponsored cargoes to American-flag vessels-we can begin to move back again to our position of preeminence on the high seas.

This committee has repeatedly emphasized just how far we have slipped in maritime affairs in the past two decades. We used to be No. 1 in the amount of cargo we carried; we used to be No. 1 in shipping: we used to be No. 1 in shipbuilding. Now we have fallen so far behind our competitors in all of these fields that we have to strain our imagination or our memory-to call ourselves a maritime power.

We are not powerful in maritime circles these days-but we should be. The reason we are not powerful is that, under the present arrangement, we have appointed a Maritime Administrator, told him that he is supposed to be in charge of our maritime affairs, and then promptly proven that he wasn't by designating other people to speak for, and to rule on, our maritime program.

For years now, the Maritime Administrator has really been a minister without portfolio-a man without an agency to run-a messenger boy, and little more, for the Under Secretary of Commerce for Transportation, or for the Secretary of Commerce, or for anyone else in the bureaucratic hierarchy who had a particular ax to grindand usually a nonmaritime ax, at that.

The situation is even more untenable now. Last year, because of the leadership provided by the chairman and members of this illustrious committee, we in Congress refused to put the Maritime Administration into the Department of Transportation. I don't know how we could have spoken any more plainly on this subject. And yet today we find the Secretary of Transportation-not the Maritime Administratorproposing maritime policy, arguing maritime policy, negotiating maritime policy with labor and management-in short, a Secretary of Transportation running the very agency we told him we did not want in his Department.

This is a flagrant attempt to circumnavigate this Congress. But of even greater significance is not the fact that a Secretary is acting extralegally, but that the program he espouses is bad for our country's Defense Establishment, it is bad for our international economy, and it is bad for our domestic economy.

The trouble is very simple: Neither the Secretary of Commerce, in the past, or the Secretary of Transportation, today, has had any full

comprehension of this industry, of its complexities, or of its problems. And not totally appreciating these things, it has been impossible to arrive at any sensible solutions.

If we move forward now with this legislation to establish an independent Federal Maritime Administration, if we then see to it that the Administrator is a man who understands the problems of this industry, and, if we in Congress make sure that the agency has the funds with which to do the job, then we will have some promise of reestablishing ourselves as a maritime nation again.

As one of the sponsors of this legislation aimed at maritime independence, I pledge my full support to the work this committee is doing to make sure that this resurgence of our maritime strengthjust a hope for so long-will soon become a reality. Thank you, Mr.

Chairman.

The CHAIRMAN. Are there any questions? Mr. Dent, the committee thanks you for a very fine statement.

Our next witness is another colleague from Pennsylvania, the Honorable Joshua Eilberg. Mr. Eilberg.

STATEMENT OF HON. JOSHUA EILBERG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. EILBERG. I am delighted, Mr. Chairman, to be able to testify in behalf of our similar bills aimed at the creation of a separate Maritime Administration.

I know that a Department of Transportation is important in order to bring together under one roof the various agencies which are com ponents of our domestic transportation network. But I oppose inclusion of the Maritime Administration in that Department of Transportation.

We have had an example of what can happen to this vital agency when it is stuck off in some obscure corner of a Cabinet-level depart ment. That has been its misfortune for the past 15 years, and I do not believe it would fare any better in the Department of Transportation than it has in the Department of Commerce.

Recently, our colleague, the Honorable John Rooney of New York, had something to say on the subject of foreign building of U.S.-flag merchant ships in a speech which he gave at the launching of the U.S.S. President Taft at Pascagoula, Miss. The gentleman from New York, I understand, told his audience: "I will not agree to appropriat ing 15 cents to build an American ship in a foreign shipyard."

I support Mr. Rooney's view. We cannot begin building our ships abroad unless we want to ruin our own shipbuilding capability. It is naive, I believe, to think that our shipyards would ever be able to retain this business, once it has gone abroad. As a matter of fact, it is naive to suppose that we can open the door just a crack to foreign construction. Once the law were amended, we would have destroyed the build-at-j home theory, and it wouldn't be long before all of our ships-instead of just some of them-were under construction overseas.

A shipbuilding capability is essential to the defense of our country. It is more of a mistake to rely on a foreign-built ship than it is to rely on a foreign-flag ship, for in time of national emergency any conflict

of interest could end up with us being the loser. I think the recent Middle East crisis gave us some compelling evidence to sustain the unreliability of foreign-flag ships. American-owned vessels sailing under a Liberian flag were ordered to recognize the Arab blockade of the Gulf of Aqaba in absolute opposition to U.S. policy. If this could happen to an American-owned ship, what could happen to ships built abroad during times of crisis when our Government and the government of the shipbuilding nation had opposed political views.

How can we even think of building ships abroad when our own shipbuilding industry is capable of handling our present needs and when it is in a sad economic state precisely because we are not giving it the opportunity to build ships? Less than a hundred vessels have been built in American yards during the past 6 years. This is less than an average of 17 vessels per year, less than one ship per shipyard per year. We have the capacity; why aren't we using it? What possible reason can there be for starving our own shipyards and their employees and feeding those of other countries?

Shipbuilding has the potential for being a significant part of the American economy. Even operating at less than capacity, it provides jobs for thousands upon thousands of American workers. În addition to those who are directly employed in American yards, there are three, four-even five-persons employed in related fields. The incomes of all of these people would be imperiled by any move to build in foreign yards. The tax revenues from these earners, and from the industries which employ them, would likewise be imperiled.

I would like to touch on another fact here involving our Nation's economy. There can be no denying our living standards are higher than those of any other nation in the world. With all our troubles, we are still considerably better off than we could be if our circumstances more closely approximated those of other nations, including other shipbuilding nations.

Is it not reasonable to assume, then, that even if cheaper prices might be possible for ships built in foreign yards, these savings might represent false economies in our case? Rather than help support one end of one part of our economy-the substantial maritime industrysuch a move may contribute to the erosion of the very standard of living we seek to improve.

We need to upgrade our maritime endeavors, not downgrade them by hiding them in a bureaucratic maze. The only way that we can upgrade our maritime status-the only way that we can become a maritime power again-is to get on with the job of maritime independence.

An independent Maritime Administrator, freed from the restraints of vetoes within the department structure, should be able, I believe, to come up with the new, forward-looking programs that will end our decline on the seas. Thank you.

Mr. Chairman, I have attached to my statement excerpts from the Journal of Commerce of Wednesday, July 12, 1967, which I request be placed in the record of these hearings.

The CHAIRMAN. Without objection, so ordered.

(The excerpts follow:)

[From the Journal of Commerce, July 12, 1967]

SHIPYARDS WILLING TO BE PUT TO TEST

WASHINGTON, July 11.—The U.S. shipbuilding industry said today that allega tions that yards have insufficient capacity to construct the number of merchant ships needed "just aren't true."

"... There is sufficient, competent and ready capacity to build as many as 50 large, oceangoing merchant ships annually" and "given the opportunity to carry out an orderly, carefully planned program, the U.S. shipyard industry can meet and probably exceed the most ambitious ship replacement requirements of U.S. flag operators—of this we are truly confident,” a letter to key Senate and House members from Edwin M. Hood, president of the Shipbuilders Council of America, said.

AIMED AT CURRAN, BOYD

Mr. Hood's letter to Sen. Warren G. Magnuson (D-Wash.) and Sen. E. L. Bartlett (D-Alaska) and Rep. Edward A. Garmatz (D-Md.) was not directed at any one specifically, but it was unmistakenly aimed at Joseph M. Curran, president of the National Maritime Union, who favors allowing some foreign building if U.S. private yards can't handle the business, Alan S. Boyd, transportation secre tary, who has advocated letting operators build foreign once subsidy funds have been depleted, and the subsidized lines. Mr. Boyd also said a 50-ship-a-year program built in U.S. yards would lead to inflation in the price of ships. Mr. Hood did not go into the price aspect.

Motivation for these allegations, he said, "is all too apparent-to attempt to justify the export of shipbuilding contracts and jobs to other countries with consequent adverse effects on the balance of international payments."

"PUT US TO THE TEST"

Mr. Hood said "we therefore challenge those federal government spokesmen and shipping operators who say that U.S. shipyards cannot do the job to put us to the test. To paraphrase President Johnson's words in Baltimore last week, let's begin to talk about some of the things that are right about U.S. shipbuilding...

"... Put us to the test before there is any more talk of foreign building, give us a better procurement environment than heretofore, plus an expanding, not a limited, workload, and we will deliver the ships as required," he said.

The CHAIRMAN. We will recess until tomorrow at 10 o'clock. Tomor row's witnesses will be Hon. Alexander Trowbridge, the Secretary of Commerce; Hon. Charles L. Schultze, the Director of the Bureau of the Budget; and Hon. Alan S. Boyd, the Secretary of Transportation. (Whereupon the subcommittee recessed, to reconvene at 10 a.m.. Thursday, July 13, 1967.)